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Dead aid

Economist-turned-author says foreign aid is a political and humanitarian disaster

By Gary Kenny

Dead Aid
By Dambisa Moyo
(Farrar, Straus and Giroux) $30

In her controversial book Dead Aid, Zambian-born economist Dambisa Moyo argues that international aid is not merely a waste of money but a cause of Africa’s unrelenting poverty. Rejecting what she calls “orchestrated worldwide pity,” Moyo offers a severe message: “Aid has been, and continues to be, an unmitigated political, economic, and humanitarian disaster.” It has stymied economic growth, cultivated corruption and encouraged financial dependence on foreign donors, she writes.

By “aid,” Moyo means official development assistance, funds meted out to developing countries by rich countries like Canada and international financial institutions like the World Bank.

Moyo is right to scrutinize ODA. Over the past 30 years, donors have pumped more than $300 billion of aid into Africa. Meanwhile, the number of poor in Africa has risen. It’s a conundrum that baffles many. Aid activists will be astonished at Moyo’s solution. “What if,” she asks, “African countries each received a phone call . . . telling them that in exactly five years the aid taps would be shut off — permanently?”

Moyo can’t be dismissed as an eccentric. Educated at Harvard and Oxford universities, she has worked for the World Bank and Goldman Sachs. Nor can she be written off as a renegade with an axe to grind. She writes lamentably about how development has failed in her native Zambia.

Moyo takes aim at the state as an unreliable steward of foreign aid. She believes African economies will boom only with the help of Chinese investment, microfinance, remittances from the growing African diaspora, and borrowing on the international bond market. And for those who say more democracy is the answer? Moyo says not to worry. “It matters little to a starving African family whether they can vote or not.”

What should we make of Moyo’s prescriptions? Should aid campaigners like Oxfam and The United Church of Canada be marching under the banner “Turn off the aid taps now”?

These questions matter. More than 300 million Africans live in extreme poverty. Fighting this deprivation is an ethical and humanitarian imperative.

To formulate viable solutions, however, one must have thoroughly examined what has gone wrong, and here Moyo comes up short. For example, she ignores the impact of the debt crisis in undermining economic growth and eroding health and education systems. And programs that made aid conditional on governments signing up for damaging experiments in market liberalization barely get a mention.

Foreign aid has yielded benefits. Over two million HIV-AIDS sufferers in Africa are receiving antiretroviral drugs. Six years ago, that figure was 50,000. In the last decade, primary school enrolment rates have grown at six times the rate of the 1990s.

Aid works best when donor and recipient governments work together to create sensible strategies to reduce poverty, improve budget transparency and tackle corruption. Many African governments fail these tests, partly because they lack accountability to their citizens. That’s why Moyo is wrong to argue for democracy to be put on the back burner.

Aid is not an unqualified success story. But shock-therapy aid cuts would be irresponsible, if not dangerous. 

Gary Kenny is the United Church's Program Co-ordinator for Southern Africa and Emergency Response.
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